Kiambu residents urge Finance Committee to protect MSMEs, adopt policies that encourage local investment

Residents of Kiambu County have called on the Departmental Committee on Finance and National Planning to protect Micro, Small, and Medium Enterprises (MSMEs) and encourage local investment through the adoption of business-friendly policies.

Speaking during a public participation forum on the Finance Bill, 2026, alongside the Sovereign Wealth Fund Bill, the Central Bank (Amendment) Bill, and the Kenya Revenue (Amendment) Bill, they further urged lawmakers to ensure that the provisions of these Bills cushion citizens from a further escalation in the cost of living.

“The cost of living is currently very high. We appreciate that the National Assembly has already adopted the government’s proposal to lower value added tax on fuel to 8 per cent, but we wish you can look into other proposals on how to reduce the fuel cost,” Lucy Nyambura from Ruiru Constituency urged.

The over 200 residents who turned up at the Kiambu National Polytechnic, where the forum was held, put forward a raft of proposals which they noted would cushion them from the high cost of doing business while encouraging local investment.

“We need to adopt policies that will encourage local investors. Currently, the cost of doing business is too high and the current Finance Bill does not contain provisions that offer relief to start ups and MSMEs. How do we ensure businesses can be sustained even as we expand the tax base?” Phyllis Wangui, a resident of Kiambu, posed.

Wangui, who is also an advocate of the High Court, pushed back against the proposal to introduce VAT on certain digital and platform-based financial services.

These include payment processing services, payment gateways, digital transaction platforms, merchant acquiring services, aggregation services, and other technology-based financial systems provided for a fee or commission.

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She told the Committee that a similar proposal had resulted in lower digital financial inclusion in Ghana, Uganda, and Tanzania after its introduction. She noted that Kenya had made great strides in digital technology, adding that the proposal would roll back these hard-earned gains.

Turning to agriculture, which is the mainstay of the county’s residents, she urged the Committee to consider exempting raw materials for animal feeds and other farm inputs from value-added tax.

Reacting to this proposal, Sessional Chairperson Julius Rutto argued that farm inputs and raw materials should be zero-rated rather than exempted from value-added tax.

He observed that under an exempt status, the cost benefit is often not passed on to the consumer, who desperately requires a reprieve on the cost of farm produce.

“Exempting VAT on raw materials for animal feeds will ultimately increase the cost of the products. We would rather farm inputs are zero rated”, he pointed out.

Wangui further urged the Committee to consider introducing tax refunds for tourists visiting the country, noting that this would encourage visitors to spend more locally.

This proposal received support from Imenti South MP (Dr.) Shadrack Mwiti, who agreed that research has shown tourists spend more in countries where they are assured of receiving tax refunds.

“This is a good proposal though we have to appreciate that taxation is one of the ways to ensure we have revenue to improve our country and hence our economy,” he stated.

The residents also expressed concern over proposals to reduce VAT on scrap metal.

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Assistant County Commissioner Eric Okacha wondered if the reduction would lead to increased vandalism of road infrastructure and theft of scrap metal, potentially triggering a security crisis across the country.

“Isn’t this proposal going to encourage theft of metal creating a nightmare for those of us in the security sector,” he asked.

His sentiments were echoed by Thomas Mwangi, representing the business community, who urged the Committee not to adopt the proposal, also pushing back against the proposal to increase the duty-free allowance for returning passengers to US$2,000.

Currently, travelers returning to Kenya are allowed to bring in goods worth up to US$300 without paying VAT.

He argued that unscrupulous business people could take advantage of the expanded provision to covertly import commercial goods, to the disadvantage of local manufacturers.

Rutto, however, clarified that normal taxation protocols for the importation of goods meant for resale would still apply, noting that the amendment was strictly meant to offer reprieve to returning passengers carrying personal gifts for family members and friends.

The residents also took issue with the Bill’s proposal to empower the Kenya Revenue Authority (KRA) to issue agency notices to recover unpaid taxes.

A number of participants expressed concern that this provision, if adopted, could lead to abuse. They also observed that the proposal could result in a breach of the Data Protection Act and cautioned against its adoption.

However, Committee members assured the public that the proposal, which had recurred in several past Finance Bills without gaining the Committee’s approval, would be carefully scrutinized before any recommendation is made.

“This proposal has come before us several times but has been rejected by the Committee in the past. We will require KRA to convince us how it’s adoption would be implemented without abuse or breach of any law,” Rutto assured.

The forum also cast a spotlight on the Sovereign Wealth Fund Bill, with residents urging the Committee to institute watertight provisions to safeguard the proposed Fund from misappropriation.

Evans Kibunja, representing the youth, sought more information on the Fund and how it would be operationalized.

Committee Member Gathoni Wamuchomba, who had proposed the establishment of such a fund two years ago to cater for emerging economic shocks, took the forum through the necessity of the framework.

“Our country has been endowed with minerals and oil whose proceeds we cannot account for. The only way to protect the future of our future generations is to ensure there is such a legal framework which protects the wealth of our country,” she held.

Weighing into the debate, Umulkheir Kassim underscored the importance of the Fund, especially given that a substantial amount of national revenue currently goes toward meeting public debt obligations.

“This Fund is intended to build a savings base for future generations by establishing an endowment to support strategic infrastructure investment for future generations to cater for the period when the revenues from minerals and petroleum are depleted,” she explained.

“Given that a substantial amount of our revenue goes to meet our public debt obligations, we have to generate an alternative stream of income to support expenditure on capital projects and to distribute wealth across generations,” she added.

In the meantime, residents applauded the Committee’s efforts to educate the public on the provisions of the Bills through step-by-step explainers. They noted that there has been a significant amount of misinformation circulating, particularly surrounding the Finance Bill, and urged the Committee to actively address the challenge.

Speaking on the matter, Rutto emphasized the need for members of the public to read the official Bill and make reference only to verified provisions.

He concluded by assuring residents that their views were not in vain and would form a core part of the Committee’s final recommendations to the House.

By Juma Ndigo

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